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Take it Back?! A Quick Guide to Online Return Policies

Returns, refunds and replacements are a source of frustration. They are however an inevitable part of sales, and especially of online sales.

In the last post we shared with you some tips about managing your visitors' Data Privacy. Today we'll share some other regulation “tips”, this time to prevent product returns from becoming a pain point in your company.

Many eCommerce professionals are insecure about the regulations and processes that govern product returns. Even though online shops must comply with the same regulations as real life stores, managing reverse logistics is quite different in eCommerce. It’s time to face the facts and understand your customers’ rights, your legal obligations, and how to manage returns in a profitable way. Keep in mind that we don't claim to be legal experts. We merely offer an introduction to the topic with a set of principles and some good resources for further reading.

As stated by eBay: “We’ve found that items with clear return policies typically sell better than items that don’t”.

This shows us that with the right amount of planning, returns shouldn't be a source of fear. Today we'll share the main principles governing customers rights and legal obligations, as well as a list of Best Practices and a few examples from online shops that are doing a good job.

Rights & Obligations

1. Shipping and Delivery

According to the European Consumer Centre it is the Seller's responsibility to ensure the proper condition of the products it delivers. When hiring the services of private logistic companies, make sure to insure the products or contractually agree on the conditions you need for ideal transportation.

Bottom line, if the product doesn’t arrive at the customer’s address within 30 days after the expected delivery time, the customer has the right to cancel the order and have his/her money back. From the customer's point of view the seller is the one responsible for delivering the product and therefore if anything happens during that stage it’s your responsibility to get it sorted!

2. Repairs and Replacement

Your customer has the right to receive a product in perfect condition. If a certain product shows a unforeseen lack in quality or is visibly damaged, the customer is entitled to free repair, replacement or, depending on the circumstances, a reduction in price. To reduce your amount of unsatisfied customers, the quality of your delivered products should live up to how they are described on your website.

3. Warranties and Post-Sale Service

Customer rights for items bought online are exactly the same as those that apply to items bought in regular shops. This means that your customers have the right to return the products and claim certain warranties.

When buying online, customers must be able to read warranty conditions before making the final purchase. Apart from written warranties which you can develop yourself to promote the quality of your product, there are also state laws to defend customer rights: the so-called “Implied Warranties”.

Making a long story short, there are two major conditions your product must fulfill. On the one hand it must “do what is supposed to do” (for example: a toaster must toast). On the other, there is the “warranty of fitness for a particular purpose” which means that if you sell something for a specific use, it should comply with it. For example: if you are selling sushi rice you need to make sure it has better characteristics for making sushi than ordinary rice.

Best Practices

Let’s share some tips collected from different online companies. These are not mandatory rules, no one will come after you if you choose not to follow them. However, if your goal is to have long-lasting happy customers you might want to consider implementing a few of them.

I. Accept returns of unsatisfied customers

Sometimes there is nothing wrong with your returned product. The description is good, pictures fine, delivery came well, but your customers simply didn’t fall in love with your good. What to do?

Many companies have already embraced the “100% satisfaction guarantee”: a stamp which shows customers that they can return their products anytime, for any reason, including not being completely satisfied with them. This stamp adds extra points to your store credibility and makes your customers feel more secure to buy from you.

II. Don’t hide your return policy

Everyone appreciates an honest sale. In fact, customers prefer seeing the all the conditions beforehand than being surprised by after-sale problems.

Be clear on your return policy about who pays for the shipping and other return expenses. If the customer must pay for these fees, be clear on that from the start.

III. Set a visible and realistic timeline

It’s a good idea to give your customers plenty of time to receive and judge the condition of the product. Usually, customers expect to have 14 to 90 days to return their purchase. Make sure you include this information in your product page and/or return policy guidelines.

IV. Clarify Your Payment Methods

In the case of your customers being eligible to receive a total or partial refund, it’s important that they know and agree on the payment method. Some people are happy to be refunded in store credit or coupons while others just want their money back. If this matter is non-negotiable, your customers should know beforehand how you would proceed.

Good Examples Worth Following

IKEA follows a satisfaction guarantee philosophy, which means that customers can return (nearly) all products bought in-store, online or through the phone until 90 days after the selling point. With their public “Love it or Exchange it” policy IKEA has seduced many customers through openness and ease of returning products.

Recognized as one of the major leaders in customer service, Amazon is a great role model of how to confront returns, refunds and customer satisfaction. Amazon has developed an Online Returns Centre, an automatic hub to deal with customer enquiries on return products. By developing this system, Amazon’s great machine is able to effortlessly deal with these matters while keeping customer experience at its highest and avoiding extra service costs.

Even though Apple has a strict return and refund policy, their quality guarantees generously cover almost all problems experienced by the customer. Similar to Amazon, Apple also has an online return centre with an intuitive back-end to provide necessary support to the most demanding customers.

If you are interested in reading more about this subject or would like to keep some resources to look up later on, we recommend you to bookmark the following websites: